Today we are living in a hypercompetitive business world. The companies are competing locally and globally.
When we look at Fortune 500 after 1955, we can see that some companies failed. They were very strong and had big organizations.
What are the basic reasons of these failures? We have to carefully analyse the failures and find the correct answers.
Today's top 20 R&D spenders are spending 8% of their annual sales to R&D (Strategy&). Why do they spend such huge money?
Because they want to develop products that outsell existing market offerings or capture previously unknown market opportunities locally and globally.
The development of new products, processes and services is the response of the company to environmental, cultural and market changes. So that they create new insights, technologies, and platforms as the basis of new products.
New product development has some phases such as conception, generation, analysis, development, prototyping, and testing of new products to see product's customer value.
What should companies do to create growth, profitability, transient competitive advantage and higher customer value before than competitors? Let's see these:
The company should establish a Competitive Innovation and R&D organization.
They should hire people with good experience, know-how, emotional intelligence and personal skills.
The company should be careful to select people and give the importance to find experienced talents in R&D and also supply, production, quality, marketing, finance and customer needs. This will be a value for the company.
Give the top management support.
Give enough investment opportunity.
Give the necessary training opportunities for personal development.
They should give enough freedom and be patient about the results.
They have to cooperate with internal and external linkages and create a network model for new product development and business model innovation.
The source of internal inputs is marketing & sales, finance, engineering and manufacturing, R&D. The source of external inputs are competitors, suppliers, distributors, customers, universities, conferences, publications, patents, licensing, contract research, organizations, scientific and technological developments, and societal needs. All of these are the sources of business opportunities for R&D.
They should make competitive intelligence and establish it as a unit. Competitive intelligence is a systematic and ongoing process for gathering information to derive actionable insights from competitors, the competitive environment and trends (short and long-term) in order to further the organizations' business goals. This unit keeps the business at the cutting edge and helps with intelligent risk management.
Development and implementing long-term innovation strategy. R&D team should cooperate with other departments and identify innovation opportunities. After that they should select promising R&D projects.. I have to define that the management of R&D and new product development is a cross-functional activity. It involves input from and creates output for marketing, finance, operations, supply, quality, sales, finance, business development, strategy, human resources, legal, IT and others.
They should develop a well designed marketing strategy & marketing plan.The company should regard their strengths and weaknesses and also market opportunities and threats when preparing marketing strategy and its plan in short and long-term.
The company should make a long-term sector analysis. This is a crucial parameter for each company. Because there are changes in technology, products, services, culture and living style. Leadership should know the future of their sector. If there will be no use of products or services they have to change their product or service range to a different customer need.
They should identify innovation opportunities and prepare a promising R&D portfolio to spread the company risk that comes from unsuccessful launches. They should achieve a balance between high-risk/high-reward new product development projects.
They should consider the social and environmental consequences of new products.
Companies should keep their company's customer's needs, tastes, lifestyle and personality clearly in view.
They should keep designs simple, practical and showing quality.
The company should create a powerful brand image and it should reflect the product and company's values. The customer should feel proud and creating a value when using these products.
They should get the product, packaging and marketing desing right before diversifying and expanding in the marketplace.
Company should prepare a strategic action plan when they fail in sales and market share for their new developed product. Therefore a new product projects portfolio should be ready.
They need to be aware of the Valley of Death! The people should have true skills and available resources to create successful product innovations to ensure products do not die in the Valley of Death.
Managing R&D and new product development is closely integrated with innovation management.
There are a lot of business opportunities locally and globally and we have to collect them. Do you know snowball gaining? Big snowball is the sum of generated successful business opportunities! Do you have enough experience, know-how, skills, sources and speed?
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